| If
you have been the victim of fraud or have information about
illegal or unlicensed business practices in the City of Los
Angeles,
please contact theOffice of the City Attorney Community Hotline
City Attorney Rocky Delgadillo is working to protect consumers
from fraud and illegal activities committed by unlicensed
and illegal businesses. The City Attorney’s Consumer
Protection Unit prosecutes unlawful commercial practices ranging
from unlicensed conduct to outright fraud.
City Attorney Delgadillo has created the following guide
for consumers to protect themselves from becoming victims
of these crimes.
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Under California law, an immigration consultant cannot provide
you with any advice on your immigration matters. They are
not lawyers and should not and cannot give you advice. An
immigration consultant may only provide assistance with translating
information, locating and securing documents on your behalf,
completing forms with answers that YOU provide.
An immigration consultant MUST provide you with a written
contract (in English AND in Spanish) that, among other things:
a. Highlights services to be performed;
b. Provides costs of the services;
c. Includes a statement that he/she is not an attorney;
d. Identify the documents that the immigration consultant
is to prepare; and
e. States the purpose for which the immigration consultant
had been hired.
Suggestions:
- Do Not Sign a Contract Unless You Understand It. You may
be committing a crime if you sign INS or other official
documents if they contain false statements.
- Get a receipt. Make sure the immigration consultant signs
the receipt.
- Make copies of all your documents. Keep original documents
in a safe place. Only provide copies of original documents
to an immigration consultant.
- You may cancel a contract with an immigration consultant
within 72 hours for a full refund. Always cancel a contract
in writing.
- Beware of common scams, including: (1) taking a consumer’s
money and not delivering any services; (2) making false
promises and implying special influence over the INS (absolutely
no one can guarantee you a work permit or any other immigration
benefit); (3) filing a frivolous application that leads
to the deportation of the client.
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Check a Contractor’s License, Bond Status, and record
of any complaints before signing a contract.
Since the home is usually one’s most precious asset,
it is wise to check on the qualifications of a contractor
before agreeing to have work done. If you do your homework,
you may avoid being a victim of shoddy work or contractor
fraud. To check on the contractor’s license, bond and
record of complaints, you should contact the Contractors State
License Board at (800) 321-2752 or “www.cslb.ca.gov”.
The phone number and Web-site also provide advice about what
you should know before hiring a contractor.
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- Check an auto repair shop’s license and discipline
record before agreeing to have the shop perform work on
your car.
Check before it is too late. To check on an automobile repair
shop’s registration status, history of confirmed violations
of the auto repair act and any disciplinary actions, please
contact the State Bureau of Automotive Repair at (800) 952-5210
or “www.smogcheck.ca.gov”. The number and Web-site
also provide advice to consumers and a listing of registered
shops within geographical areas.
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- Protect personal information from identity theft.
One of the fastest growing crimes in the United States is
identity theft. Identity theft occurs when someone steals
your identity and proceeds to ruin your credit or commit crimes
in your name. The easiest way to safeguard against the crime
of identity theft is to protect your personal information
by not intentionally or unwittingly giving it out to businesses
or persons. Personal information includes your name, address,
social security number, driver’s licence and mother’s
maiden name. Here are some precautions you can take:
- Shred all mail or documents containing personal information
before throwing it into the trash. This includes all mailed
offers of credit. Persons committing identity theft will
often go through people’s trash for credit applications
and obtain credit cards at a different address.
- Do not give out personal information over the phone,
Internet or in response to a solicitation. Be particularly
cautious about giving out personal information when you
register at malls or fairs for contests, raffles or free
screenings, such as vision tests, mammograms, or blood pressure
checks. Your information may become part of a marketing
database, which will then be sold over and over again.
When you have to give out personal information, such as when
setting up a checking account, ask that the information be
kept confidential and not sold to marketers.
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- Be aware of scam artists soliciting donations.
Scam artists soliciting charitable donations, prey on those
persons wishing to help others. The public is advised to be
leery of unsolicited calls, door to door or Internet solicitations,
and other approaches by unknown groups claiming to be accepting
money on behalf of charities. Angelenos should be on the watch
for solicitations by persons claiming to represent victims
of terrorism, local hospitals, or police or sheriff departments.
Beware of any solicitor who offers to pick up your donation
at your home or office, or who asks you to make out your check
to names other than the charity they claim to represent.
To insure that your donations benefit actual charities ,
it is better to make your donations directly to the charity
after verifying its legal status. Under the law, charitable
groups must have a legal status with the IRS and have an information
card issued by the Los Angeles Police Commission if soliciting
donations within the City. If you feel that you have been
approached or victimized by a bogus organization, please contact
the Consumer Protection Section of the City Attorney's Office
at (213) 485-4515, California Attorney General’s Office,
Registry of Charitable Trusts at (916) 445-2021 or the Charitable
Services Section of the Los Angeles Police Commission at (213)
978-1155.
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- Be aware of “Advance Fee” loan scams.
A different breed of "loan shark" is out there
taking unwary consumers’ money for the promise of a
loan, credit card or other extension of credit. Remember that
con artists will say anything to get you to pay money up-front.
Their con usually works as follows:
Advertisements and promotions for advance fee loans "guarantee"
or suggest that there's a high likelihood of success that
the loan will be awarded, regardless of the applicant's credit
history. But, to take advantage of the offer, the consumer
first has to pay a fee.
A common scam is once the consumer pays the fee, the scam
artist takes off with the money, and the loan never materializes.
In order to avoid falling prey to this scam, you should know
that:
- Legitimate guaranteed offers of credit do not require
payments up front. Legitimate lenders may require consumers
to pay application, appraisal or credit report fees, but
these fees seldom are required before the lender is identified
and the application completed. In addition, the fees generally
are paid to the lender, not to the broker or arranger of
the "guaranteed" loan. If you don't have the offer
in hand or confirmed in writing and you're asked to pay,
don't do it. It's fraud and it's against the law.
- Legitimate lenders may guarantee firm offers of credit
to credit worthy consumers, but they rarely do this before
evaluating a consumer's creditworthiness. Legitimate lenders
never "guarantee" or say that you are likely to
get a loan or a credit card before you apply, especially
if you have bad credit, no credit, or a bankruptcy.
- Because advertisements for these fraudulent advance fee
loans generally appear in respectable publications or media
outlets, please be mindful that this is no guarantee of
the legitimacy of the company behind the ad.
Here is advise to avoid being taken by advance fee loan sharks:
- Don't pay for a promise. It's illegal for companies doing
business by phone to promise you a loan and ask you to pay
for it before they deliver.
- Ignore any ad or hang up on any caller that guarantees
a loan in exchange for an advance fee. Legitimate lenders
never "guarantee" or say that you will receive
a loan before you apply, especially if you have bad credit
or no credit record.
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- Be aware of Credit Repair Fraud
No matter what anyone says, you cannot erase bad credit.
Individuals or companies making this claim are engaged in
fraud.
Here are legitimate things you can do to improve your credit
or reduce payments to creditors:
- Under the Fair Credit Reporting Act, you can question
an item in your credit file and your complaint must be investigated.
However, the negative information will be removed only if
an investigation determines it’s incorrect. A credit
repair company, no matters what it claims, cannot compel
the credit bureau to remove negative information from your
file, if that information is accurate.
- Some companies claim they will work with your creditors
to consolidate your debts, or reduce the size of your monthly
payments. Before you pay large sums of money to these companies,
call the Federal Trade Commission’s toll free number
(1 877 382 4357) for referral to non profit counseling services
that provide free or low cost help.
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- Be aware of Home Equity Loan Scams
If you own your home, it's likely to be your greatest single
asset. Unfortunately, if you agree to a loan that's based
on the equity you have in your home, you may be putting your
most valuable asset at risk. Homeowners particularly elderly,
minority and those with low incomes or poor credit should
be careful when borrowing money based on their home equity.
Why? Certain abusive or exploitative lenders target these
borrowers, who unwittingly may be putting their home on the
line. Abusive lending practices range from equity stripping
and loan flipping to hiding loan terms and packing a loan
with extra charges. The Los Angeles City Attorney’s
Office urges you to be aware of these loan practices to avoid
losing your home.
Typical Home Equity Loan Scams:
- Equity Stripping
You need money, but have built up equity in your home. A
lender tells you that you could get a loan, even though
you know your income is just not enough to keep up with
the monthly payments. The lender encourages you to "pad"
your income on your application form to help get the loan
approved. Beware, this lender may be out to steal the equity
you have built up in your home. The lender doesn't care
if you can't keep up with the monthly payments. As soon
as you don't, the lender will foreclose taking your home
and stripping you of the equity you have spent years building.
If you take out a loan but don't have enough income to make
the monthly payments, you are being set up and will probably
will lose your home.
- Hidden Loan Terms: The Balloon Payment
You've fallen behind in your mortgage payments and may face
foreclosure. Another lender offers to save you from foreclosure
by refinancing your mortgage and lowering your monthly payments.
Look carefully at the loan terms. The payments may be lower
because the lender is offering a loan on which you repay
only the interest each month. At the end of the loan term,
the principal that is, the entire amount that you borrowed
is due in one lump sum called a balloon payment. If you
can't make the balloon payment or refinance, you face foreclosure
and the loss of your home.
- Loan Flipping
Suppose you've had your mortgage for years. The interest
rate is low and the monthly payments fit nicely into your
budget, but you could use some extra money. A lender calls
to talk about refinancing, and using the availability of
extra cash as bait, claims it's time the equity in your
home started "working" for you. You agree to refinance
your loan. After you've made a few payments on the loan,
the lender calls to offer you a bigger loan for, say, a
vacation. If you accept the offer, the lender refinances
your original loan and then lends you additional money.
In this practice often called "flipping" the lender
charges you high points and fees each time you refinance,
and may increase your interest rate as well. If the loan
has a prepayment penalty, you will have to pay that penalty
each time you take out a new loan.
The end result is that you now have some extra money
and a lot more debt, stretched out over a longer time.
The extra cash you receive may be less than the additional
costs and fees you were charged for the refinancing. And
what's worse, you are now paying interest on those extra
fees charged in each refinancing. Long story short? With
each refinancing, you've increased your debt and probably
are paying a very high price for some extra cash. After
a while, if you get in over your head and can't pay, you
could lose your home.
- The "Home Improvement"
Loan
A contractor calls or knocks on your door and offers to
install a new roof or remodel your
kitchen at a price that sounds reasonable. You tell him
you're interested, but can't afford it. He tells you it's
no problem he can arrange financing through a lender he
knows. By saying no now, you will save yourself a lot of
grief. The lessons here are to be leery of unsolicited approaches
and to never agree to have a contractor arrange for financing.
If you had gone along with the contractor’s proposition,
he would have begun the project and then at some point
asked you to sign a lot of papers. In the usual scenario
the papers may be blank or the contractor may rush you
to sign before you have time to read what you've been
given. The contractor threatens to leave the work on your
house unfinished if you don't sign. You sign the papers
and only later, realize that the papers you signed are
a home equity loan. The interest rate, points and fees
seem very high. To make matters worse, the work on your
home isn't done right or hasn't been completed, and the
contractor, who may have been paid by the lender, has
little interest in completing the work to your satisfaction.
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Signing Over Your Deed
If you are having trouble paying your mortgage and the
lender has threatened to foreclose and take your home,
you may feel desperate. Another "lender" may
contact you with an offer to help you find new financing.
Before he can help you, he asks you to deed your property
to him, claiming that it's a temporary measure to prevent
foreclosure. This is the beginning of the end, because
the promised refinancing that would let you save your
home never comes through. Once the lender has the deed
to your property, he starts to treat it as his own. He
may borrow against it (for his benefit, not yours) or
even sell it to someone else. Because you don't own the
home any more, you won't get any money when the property
is sold. The lender will treat you as a tenant and your
mortgage payments as rent. If your "rent" payments
are late, you can be evicted from your home.
In order to avoid becoming a victim of home equity fraud
, you can protect yourself by remembering the following “DON’TS”:
- Never agree to a home equity loan if you don't have enough
income to make the monthly payments;
- Never sign any document you haven't read or any document
that has blank spaces to be filled in after you sign;
- Never let anyone pressure you into signing any document;
- Never let the promise of extra cash or lower monthly payments
get in the way of your good judgment about whether the cost
you will pay for the loan is really worth it; and
- Never deed your property to anyone. First consult an attorney,
a knowledgeable family member, or someone else you trust.
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